Sault Ste. Marie enjoys revival

Michigan State Roundup

After a slump of more than two decades, the eastern Upper Peninsula
(U.P.) town of Sault Ste. Marie is experiencing economic growth.

In the early 1960s, Sault Ste. Marie, which sits on the border between
the United States and Canada, saw the closure of several manufacturing
plants, and in the 1970s the Air Force base 20 miles to the south shut
down. Both took big bites out of available jobs.

But three events in recent years have contributed to the city's comeback:
new and steady jobs at the Chippewa County prisons, the Indian-owned casino
in town and more Canadians crossing over to shop.

Because of these events, population has increased to 14,689, making
it one of the few U.P. towns with a rising population; building permits,
driven by commercial construction, tripled in 1991 and 1992 over the
previous four-year average; and, with the addition of new jobs and increased
Canadian shopping, the city's retail base has expanded.

Ten years ago the state built five new prisons at the former Air Force
base. According to Spencer Nebel, city planner, this was the first step
on the road to economic recovery. "It provided stable, recession-proof
employment."

Then came the casino Vegas Kewadin in 1985. Owned and run by the Sault
Ste. Marie Tribe of Chippewa Indians, the casino stands in town on reservation
land and is the tribe's largest operation. The casino is one reason the
tribe is Sault Ste. Marie's largest employer, with 1,400 employees.

Retail responded to the new jobs and flowing cash, and people from the
surrounding area started coming to Sault Ste. Marie to shop, work and
live. Many of these new shoppers were from Sault Ste. Marie's Canadian
neighbor of the same name, located just across the International Bridge,
with a population of 81,476.

With sales tax hikes on the Canadian side of the border and a favorable
exchange rate on the US side, Canadians come for low prices and stay for
a good time, Nebel says. Traffic over the International Bridge doubled
between 1985 and 1991, to upwards of 4 million trips a year. It is estimated
that a sizable portion of the traffic was Canadian.

Recent draws are the quickly developing Business Spur on the interstate,
a new motel at the casino and a large new shopping mall. The Cascade Crossing
Shopping Center opened late last year with Wal-Mart as the anchor, with
an estimated 1,000 jobs in the making and a major expansion planned this
year.

The economic boom has not spread to manufacturing industries, even though
the stage is set. The 1988 Free Trade Agreement between the United States
and Canada lifts most tariffs between the two countries, including tariffs
on groceries, telecommunications, forestry, and paper and aluminum products.
Michigan Sault Ste. Marie's financial incentives have not lured a significant
number of manufacturing enterprises. Ontario's Sault is highly industrial,
with the bulk of its jobs in steel and paper.

Nebel believes that as the "economic border" between the United States
and Canada dissolves through trade agreements, the two Saults will work
together to entice more manufacturing, especially to the US side of the
border. "It would be beneficial to both," he says. Talks between the twin
cities have already begun.